On April 21, 2021 Onxeo S.A. (Euronext Growth Paris: ALONX, Nasdaq First North Copenhagen: ONXEO), a clinical-stage biotechnology company specializing in the development of innovative drugs targeting tumor DNA Damage response (DDR) in oncology, reported its consolidated financial results for the fiscal ending December 31, 2020, and provided a business update (Press release, Onxeo, APR 21, 2021, View Source [SID1234578293]).
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Judith Greciet, Chief Executive Officer of Onxeo, declared: "2020 was marked for all by an unprecedented health crisis. Yet it will have allowed Onxeo to demonstrate the resilience of its teams and strategy. The clinical program for AsiDNA, our lead candidate, made very significant progress in 2020 on its two development axes, synergy of efficacy with DNA breakers as radio or chemotherapy, and the fight against tumor resistance to targeted therapies.
On the first axis, the positive efficacy signals obtained in DRIIV-1b, combining AsiDNA with reference chemotherapies, have enabled the preparation of a randomized phase 2 trial in lung cancer. Its adaptive design would allow it to be converted into a pivotal study based on initial positive results. Enrolment will start in the second half of 2021, as soon as regulatory approval is obtained. We have also initiated a Phase 1b/2 pediatric program with the Curie Institute in recurrent high-grade glioma, a brain cancer with a poor prognosis, against which the combination of AsiDNA with radiotherapy could offer an efficacy gain.
In the fight against resistance to targeted therapies, the Phase 1b/2 Revocan study, which is evaluating the effect of AsiDNA on resistance to a PARP inhibitor in ovarian cancer, began in late 2020 and patient enrollment is ongoing. This study is sponsored by Gustave Roussy who leads its management and we expect to receive preliminary results from the first group of patients during the second half of the year. In addition, recent results presented at AACR (Free AACR Whitepaper) 2021 confirm the effect of AsiDNA on drug-tolerant cells, one of the causes of resistance to targeted therapies such as PARP, KRAS or tyrosine kinase inhibitors. These results provide a strong rationale to consider an expansion of the clinical development of AsiDNA in other very high potential combinations.
Finally, the OX400 candidates have confirmed in preclinical studies their action on tumor metabolism and the immune system, presaging promising clinical combinations with immunotherapies.
This extensive and ambitious R&D program reflects the significant potential of our candidates in multiple combinations and therapeutic areas.
Over the past twelve months, we have also significantly strengthened Onxeo’s financial and shareholder structure. Invus, an international investor specializing in biotechnology, has joined Financière de la Montagne in the capital and on the Board of Directors of the Company. Their support has contributed to extend our financial horizon to the end of 2022 – well beyond the major clinical milestones expected in the next 18 months – and validates our strategy to expand the clinical and industrial development of our candidates."
The 2020 consolidated accounts were approved by the board of directors on April 21, 2021. The audit procedures on the consolidated accounts have been carried out. The certification report is in the process of being issued.
Revenues for the year 2020 amounted to €1.8 million and include:
€1.1 million in recurring revenue corresponding to sales of Beleodaq under the European Named Patient Program (NPP) and royalties on sales of Beleodaq in the United States by the partner Acrotech Biopharma. Its decrease from €3.5 million in 2019 is explained by the transfer of this activity to Acrotech as part of the licensing agreement signed in early April 2020.
€0.7 million in non-recurring revenue, comprising contractual lump-sum royalties under the business transfer agreement signed in 2017 with Vectans Pharma.
Operating expenses amounted to €9.8 million, compared to €14.1 million in 2019. The 31% decrease is mainly related to lower R&D expenses, notably manufacturing operations of AsiDNA for clinical trials in 2019, as well as strict management of all the Company’s expenses.
Other operating income (non-current) amounted to €10.0 million and included the impacts of the agreement with Acrotech Biopharma in April 2020, namely:
a net income of 5.7 million euros corresponding to the transaction price of €6.1 million less payments to be made to Acrotech Biopharma for future product development costs estimated at €0.4 million;
a charge of 2.8 million euros corresponding to the net book value of the R&D assets related to Beleodaq/belinostat, reflecting the treatment of the contract with Acrotech under IFRS as a sale agreement;
7.1 million euros of proceeds, evaluated on the basis of the financing plan established by management, corresponding to the royalties that the Company expects to receive after the date of signature of the agreement and that are intended to repay the balance of the loan contracted with SWK Holdings Corporation. This amount includes 1.6 million euros of royalties recorded for 2020 after the transaction.
The financial result of €-0.3 million is mainly explained by the interest expense related to the bond debt with SWK.
The tax charge is €0.8 million and includes deferred taxes of €0.4 million, relating to the royalties the Company expects to receive after December 31, 2020, through which it will repay the balance of the SWK loan.
Net income for the year ended December 31, 2020 was a profit of €1.1 million, resulting mainly from the Acrotech transaction and its accounting treatment under IFRS, compared with a loss of €33.7 million for the year ended December 31, 2019 that was linked with a €12.9 million impairment of belinostat-related R&D assets as well as the impacts of the settlement agreement signed with SpePharm early 2020 (-€9.6 million).
STRENGTHENED FINANCIAL STRUCTURE
As of December 31, 2020, the Company had consolidated cash and cash equivalents of €14.5 million, compared to €5.7 million at the end of fiscal 2019. This sharp increase stems from financing obtained during the year; in particular, the Company completed a private placement in June 2020 with a new investor, Invus Public Equities LP, and Financière de la Montagne, the historical shareholder, for €7.3 million, and it also used the balance of its equity financing line for €3.2 million. The Company also received a payment of $6.6 million in consideration for the granting of additional exclusive rights to belinostat to Acrotech Biopharma LLC in April 2020.
The Company’s cash position has since been strengthened by obtaining, at the end of January 2021, a €5 million financing in the form of State Guaranteed Loans (SGL) and by the proceeds of the capital increase with shareholders’ preferential subscription rights (PSR) finalized on April 12, for a gross amount of €9.7 million. The Company’s financial visibility has thus been extended to the end of 2022.
FULL-YEAR 2020 HIGHLIGHTS, RECENT DEVELOPMENTS AND OUTLOOK FOR 2021
AsiDNA
Revocan study
At the beginning of 2020, Onxeo launched the Revocan study to evaluate the effect of AsiDNA on acquired resistance to a PARP inhibitor (PARPi), in 2nd line recurrent ovarian cancer. This Phase 1b/2 study is sponsored by Gustave Roussy. Enrollment in the study began at the end of 2020 and is continuing, albeit at a slower pace than anticipated, notably due to the epidemic situation. However, it should be noted that as study sponsor, GR is managing the project. Preliminary results of part 1b, initially expected in the first half of the year, are now expected from Gustave Roussy in the second half of the year. The study aims to confirm preclinical data presented at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting in June 2020, which showed the ability of AsiDNA to reverse PARPi resistance, notably by preventing the regrowth of drug-tolerant cells.
DRIIV1-b study – Upcoming phase 2 study
Onxeo published favorable interim results from the DRIIV-1b study of AsiDNA in combination with standard of care chemotherapies in patients with progressing metastatic tumors in November 2020. Exceptionally long disease control times were observed and are particularly encouraging signals of efficacy. As a result, the Company plans to continue development in this combination in 2021 with a randomized Phase 2 study of AsiDNA in non-small cell lung cancer. The adaptive design of this international multicenter study, currently under development, would allow its transformation into a pivotal study.
New clinical developments
In February 2021, Onxeo entered into a clinical research agreement with Institut Curie, France’s leading cancer center, to conduct a Phase 1b/2 study to evaluate the effect of AsiDNA in combination with radiotherapy in children with recurrent high-grade glioma (HGG) eligible for re-irradiation. This study is supported by a grant from the European Fight Kids Cancer program and is being conducted as part of the European Innovative Therapies for Children with Cancer (ITCC) consortium.
As part of the acceleration of its development, the Company may also file an IND application to expand the clinical program of AsiDNA in the United States.
INTELLECTUAL PROPERTY
In 2020, Onxeo pursued an active policy of industrial protection. The Company received a notice of allowance from the U.S. Patent and Trademark Office for a new patent enhancing the protection of AsiDNA, which will be valid in the United States until 2037. A notice of intent to issue a new patent enhancing protection in Europe for AsiDNA combined with PARP inhibitors was also announced in late October 2020. Onxeo’s portfolio of candidates is now protected by several patent families in all territories of interest until 2040.
OX400
Onxeo continued preclinical studies of new OX400 candidates, next-generation PARP agonists from its proprietary platON platform, in 2020. New results presented at AACR (Free AACR Whitepaper) 2021 confirm that by specifically trapping and hyperactivating PARP, OX400 compounds have the potential to modulate the immune response and deplete tumor cell metabolism. The preclinical proof of concept of one or more OX400 compounds, expected in 2021, will be the starting point for the activities necessary for entry into the clinic, potentially in combination with immunotherapy, within 12 to 18 months.
CORPORATE & GOVERNANCE
In February 2020, Onxeo announced that it had reached an out-of-court settlement agreement with SpePharm and SpeBio. As part of this agreement, Onxeo will pay SpePharm 15 to 20% of the net amounts to be received under future commercial agreements relating to Onxeo’s R&D assets, for a total cumulative amount of 6 million euros within a period of 4 years, i.e. at the latest on January 31, 2024. The balance of this debt amounts to 5.1 million euros at December 31, 2020;
At its meeting on September 17, 2020, the Board of Directors of Onxeo co-opted Invus Public Equities LP, represented by Mr. Julien Miara, as a director of the Company to replace Mr. Jean-Pierre Kinet, who resigned;
In December 2020, Onxeo transferred the listing of its shares from the regulated market of Euronext Paris (compartment C) to the multilateral trading system Euronext Growth Paris. By coherence, Onxeo shares listed in Denmark on the Nasdaq Copenhagen regulated market have been transferred to the Nasdaq First North Growth multilateral trading facility.
CONTEXT OF THE COVID-19 PANDEMIC
The continuation of the global health crisis linked to the Covid-19 epidemic creates an uncertain situation. Even if Onxeo has been little impacted in 2020, it is difficult to measure the repercussions on the Company’s activity and financial situation, which will depend on the intensity and duration of this crisis. The Company has put in place appropriate measures to protect its employees and to ensure the continuity of its operations. It will adapt these measures to the circumstances.
The 2020 Financial Report will be available on the Company’s website as of April 23, 2021.